Wise Uncle Ben

Here’s a recent article on health insurance that includes links to some helpful resources.

New York Times:

If there is one thing that separates the self-employed from those employed by others, it is their preoccupation with health insurance.

I was reminded of this on Feb. 14, when I wrote a post on the Shifting Careers blog asking small-business owners and would-be entrepreneurs what they were doing about health insurance. Within hours, scores of people posted comments about their own experiences and, if they had managed to find good resources, shared those. I have been reading e-mail messages and trying to make sense of the subject ever since. In short, it is not pretty out there.

The unluckiest are those with chronic illnesses or the dreaded pre-existing condition that results in a denial of coverage. Many of these people abandon dreams of entrepreneurship altogether because they need jobs that come with a health plan and they cannot find a way to self-insure.

Photo by xferedgg

• Leave a comment... (0)

We all know talented people who stay in corporate jobs solely because they fear losing access to health insurance. Many have significant experience and adequate start-up money, but find themselves unsure of how to, or even if they can, bridge the coverage gap between COBRA and Medicare. Preexisting conditions, either their own or a family member’s, keep many would-be entrepreneurs from going out on their own. Is this really what’s best for our economy?

How Did We Get Where We Are?

As evidenced by the theme of this blog, I have great respect for our Founding Fathers and their Age-of-Enlightenment ideal of self-reliance. Part of the American ethos is the goal of pulling yourself up by your bootstraps. But pulling yourself up by your bootstraps is only possible when you are well enough to put forth the effort. Moreover, one cannot reasonably compare the healthcare available in the 18th century to our present system. Even for the gravest of conditions, it may have been prudent to avoid a doctor in colonial American given that germ theory and routine hand washing were more than a century away. In any case, the first health insurance policy wasn’t offered in the U.S. until 1890.

So how did it come about that most Americans obtain health insurance through their employer? World War II Specifically in 1942, the National War Labor Board imposed a wage freeze on employers, but did not include health insurance and other fringe benefits in its freeze. This led many employers to offer health insurance in lieu of wages to retain their best and brightest.

A Level Playing Field for Small Businesses

• 80% of U.S. employees work for a small business
• Employees of small business pay 18% more for premiums on average

While it is difficult to make direct comparisons with other countries primarily because they moved to universal coverage some time ago, entrepreneurship continues to thrive in other industrialized countries such as Ireland despite, or possibly because of, universal coverage.

Current Small Businesses

Small businesses pay a disproportionately larger share of the cost to cover the uninsured through their significantly higher premiums per employee. At the very least, our current system makes it harder for them to provide competitive benefits to their employees. It may even discourage some highly skilled, but insurance-sensitive people from considering an offer from a small business. As the Reuters article below demonstrates, healthcare costs are a real issue for small businesses today. But what about the new businesses that haven’t been started?

Potential Entrepreneurs

New York Times:

“If Bill Gates had to worry about health insurance would he have started Microsoft? Who knows,” said Katherine Swartz, an economist at the Harvard School of Public Health.

The cost and availability of healthcare coverage discourages many would-be entrepreneurs from venturing out on their own. The value that these businesses would have created, but for the current system of coverage, is difficult to estimate. Nonetheless, can we afford such a deterrent to would-be entrepreneurs? Small business is the engine of growth in our economy. How many people are waiting in the wings to forge out on their own if this one issue is addressed? If our system continues to punish the risk takers, don’t we all lose out by having a smaller, weaker economy?

Reuters:

The mom and pop businesses that make up the bulk of America’s employers, key players in scuttling health reform during the Clinton years, say years of crushing costs have them backing major changes this time around.

The National Federation of Independent Business helped derail President Bill Clinton’s effort to overhaul the health insurance system during the 1990s, with a massive direct mail and telephone campaign, and a blitz of lawmaker lobbying.

Now, small companies with an average of 10 workers are bearing the greatest burden of insurance premium increases, which have grown twice as fast as inflation for several years. They’ve started lobbying the presidential candidates early and are pushing for changes to taxes and state laws.

• Leave a comment... (0)

Yesterday Forbes released their annual listing of the world’s billionaires. I always find it fascinating to see how many of the billionaires are self-made. Even more inspiring is how many of them made their fortunes in a business that is relatively easy to understand. To quote the world’s richest man, Warren Buffett:

Risk comes from not knowing what you’re doing.

I have nothing but respect and admiration for Warren Buffett and his remarkable record, but his skill set is inimitable for most people. Even though the principles of value investing are readily available to anyone who reads The Intelligent Investor, making a fortune the way he did requires a substantial dedication to developing strong analytical skills. Here are a few of the top 20 that I find most inspiring both for the simplicity of their businesses and their impact on the marketplace.

Ingvar Kamprad & IKEA

I am in the middle of reading Daniel Pink’s A Whole New Mind and what strikes me is how ahead of his time Mr. Kamprad was. One of Pink’s Six Senses is “Not just function but also DESIGN.” While Target gets a lot of credit for leading this change in the U.S., IKEA has been a world leader in bringing tasteful design to inexpensive home furnishings. In an age of CEOs who have enriched themselves while destroying shareholder value, it’s nice to know that Mr. Kamprad still flies economy class and decorates with IKEA furniture. Who knew we had so much in common?

Karl & Theo Albrecht & ALDI

Technically the Albrechts inherited some of their fortune even if it was a single corner grocery store in post-World War II Germany. In some ways, ALDI’s success is remarkably similar to IKEA’s in that they brought great value to the masses. ALDI and now its Trader Joe’s stores provide high quality private label food at rock bottom prices. ALDI was also a leader in the retail trend of charging for plastic bags to prevent waste. Thanks to the Albrechts, we all have a clearer idea of how much of the cost of a trip to the grocery store goes into advertising national brands and store overhead.

Mark Zuckerberg & Facebook

Lastly, Mark Zuckerberg may be #785 on the list, but he is still only 23. Although the technical infrastructure behind Facebook is complicated, the value of social networking is easy to understand. People want to stay in touch as effortlessly as possible. Facebook is the kind of inspiring start-up that was unimaginable just a generation ago.

Remarkably, all four of these billionaires have kept their companies private.

Who do you find most inspiring on the Forbes list?

Forbes: The World’s Billionaires

• Leave a comment... (0)

As discussed in Resolutions for Entrepreneurs: Goals & Habits, dividing your New Year’s Resolutions into goals and habits can be very useful as it allows you to work on specific objectives as well as on-going habits. Whereas your goals will change over time, your list of daily habits can last a lifetime.

The idea of a daily habit list can hardly be called new, since Franklin created his first list in 1726. However you can update the idea by making a specific habit list that aligns with one large goal such as self-improvement which was Ben’s objective. In this case, I propose that as an entrepreneur you make a list such as the one below.

The list is divided into two parts. The first six habits are virtues originally identified by Ben, but they are still quite applicable to entrepreneurs. The second group are six additional habits that an entrepreneur should develop.

At the same time every day, review your list and determine if you have behaved in accordance with this habit today.

Six Habits from Ben

Six Additional Habits for Entrepreneurs

What virtues or habits would you add to this list?

Technorati Tags: entrepreneur,goals,habits,virtues,benjamin franklin

• Leave a comment... (0)

This time of year, most entrepreneurs are trying to stick to their New Year’s resolutions. Some are probably still finalizing their lists. If nothing else, the annual exercise of writing resolutions helps to clarify your objectives for the upcoming year. In considering your New Year’s resolution, it can be very useful to break down your resolutions into goals and habits.

69 percent of entrepreneurs will make New Year’s resolutions related to their businesses for 2008.
Source: OPEN From American Express

Goals

Most entrepreneurs are familiar with setting SMART (Specific, Measurable, Achievable, Realistic & Time-bound) goals. It almost goes without saying that your goals should be written down. Certainly most new entrepreneurs have goals even if only informally. Often they are income-related, but many will have goals in several categories. At the extreme, some entrepreneurs will implement a balanced scorecard to measure and track their goals. Goals alone, however, may not cover the full range of behaviors that you want to foster in yourself to help your business succeed.

Habits

Early in his life, Benjamin Franklin identified thirteen virtues that he wanted to develop.

“TEMPERANCE. Eat not to dullness; drink not to elevation.”
“SILENCE. Speak not but what may benefit others or yourself; avoid trifling conversation.”
“ORDER. Let all your things have their places; let each part of your business have its time.”
“RESOLUTION. Resolve to perform what you ought; perform without fail what you resolve.”
“FRUGALITY. Make no expense but to do good to others or yourself; i.e., waste nothing.”
“INDUSTRY. Lose no time; be always employ’d in something useful; cut off all unnecessary actions.”
“SINCERITY. Use no hurtful deceit; think innocently and justly, and, if you speak, speak accordingly.”
“JUSTICE. Wrong none by doing injuries, or omitting the benefits that are your duty.”
“MODERATION. Avoid extremes; forbear resenting injuries so much as you think they deserve.”
“CLEANLINESS. Tolerate no uncleanliness in body, cloaths, or habitation.”
“TRANQUILLITY. Be not disturbed at trifles, or at accidents common or unavoidable.”
“CHASTITY. Rarely use venery but for health or offspring, never to dullness, weakness, or the injury of your own or another’s peace or reputation.”
“HUMILITY. Imitate Jesus and Socrates.”

Unlike goals which focus on a specific end-state, these virtues were character traits or habits that he measured daily. A number of blogs have adopted this approach for personal development, but it is no less relevant to businesses. One of the key differences between goals and habits is that your habits aren’t time-bound. For example, is there ever a time after which a business owner no longer wants to be frugal? Generally you want to measure each habit daily or at the very least weekly as the objective is to embody the habit.

Have you written your New Year’s resolution for your business? Does it include both goals and habits? In my next post, I will discuss an adaptation of Franklin’s virtues for the entrepreneur.

Business owners focus on ‘08 goals

Technorati Tags: entrepreneur,goals,habits,virtues,benjamin franklin,new year’s resolution

• Leave a comment... (1)